Consolidated Financial Statements and  Report of Independent Auditors   DLV/HHPI Summerlin, LLC     December 31, 2019
 Contents                                                                              Page  Report of Independent Auditors                                                1  Consolidated balance sheets at December 31, 2019 and 2018                     2  Consolidated statements of operations for the years ended December 31, 2019,       2018 and 2017                                                             3     Consolidated statements of changes in members’ equity for the years ended     December 31, 2019, 2018 and 2017                                            4  Consolidated statements of cash flows for the years ended December 31, 2019,       2018 and 2017                                                             5  Notes to consolidated financial statements                                    7
 Report of Independent Auditors     Members of DLV/HHPI Summerlin, LLC   We have audited the accompanying consolidated financial statements of DLV/HHPI Summerlin, LLC, which  comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the related consolidated  statements of operations, changes in members’ equity and cash flows for the year then ended, and the related  notes to the consolidated financial statements.   Management’s Responsibility for the Financial Statements   Management is responsible for the preparation and fair presentation of these financial statements in conformity  with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of  internal control relevant to the preparation and fair presentation of financial statements that are free of material  misstatement, whether due to fraud or error.   Auditor’s Responsibility   Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our  audits in accordance with auditing standards generally accepted in the United States. Those standards require  that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are  free of material misstatement.   An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the  financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the  risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk  assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of  the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for  the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express  no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the  reasonableness of significant accounting estimates made by management, as well as evaluating the overall  presentation of the financial statements.   We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit  opinion.    Opinion   In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated  financial position of DLV/HHPI Summerlin, LLC, at December 31, 2019 and 2018, and the consolidated results of  its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting  principles.   Comparative Financial Statements   We have not audited, reviewed or compiled the consolidated statements of operations, changes in members’  equity and cash flows for the year ended December 31, 2017, and the related notes to the consolidated financial  statements, and, accordingly, we express no opinion on them.   /s/ Ernst & Young LLP  Dallas, Texas  March 20, 2020
 DLV/HHPI SUMMERLIN, LLC                        CONSOLIDATED BALANCE SHEETS                              December 31, 2019 and 2018                                                                    2019               2018  ASSETS  Real estate under development$                    95,760,184   $          76,469,496 Cash and cash equivalents           52,844,217                             57,156,394 Property and equipment, net                       21,947,940               22,693,090 Deferred costs                                    41,925,670               47,745,978 Restricted cash                                    3,081,365                3,042,286 Accounts receivable                                  524,431                   198,954 Prepaid expenses and other assets                  1,319,055                4,642,113 Note receivable                                    3,755,639                   400,000 Related-party receivables                            118,183                   582,924  Total Assets$       221,276,684                                $        212,931,235  LIABILITIES AND MEMBERS' EQUITY  Accounts payable and accrued expenses$           8,705,334     $           3,531,480 Deferred revenue                                  97,695,772             110,847,098 Related party payables                             7,318,178                4,250,392 Special Improvement District bonds                   311,830                   440,696 Customer deposits                                       -                   1,662,000 Club membership deposits                          16,020,000               13,000,000 Line of credit                                     5,994,666                3,994,720 Finance lease obligations                            268,208                   488,212  Total Liabilities                                136,313,988            138,214,598  Commitments and Contingencies (see Note 15)  MEMBERS' EQUITY  Members' capital          (43,150,093)                                    (27,098,402) Accumulated earnings                             128,112,789             101,815,039  Total Members' Equity                             84,962,696              74,716,637  Total Liabilities and Members' Equity$       221,276,684       $        212,931,235                        The accompanying notes are an integral part of these consolidated financial statements.                                                                                  2
 DLV/HHPI SUMMERLIN, LLC                   CONSOLIDATED STATEMENTS OF OPERATIONS                    For the Years Ended December 31, 2019, 2018 and 2017                                                                           2017                                      2019             2018         (unaudited)  REVENUES  Real estate sales$        114,916,263           $          99,904,340 $          58,016,446 Club operations                       5,420,319              2,654,701                 569,372  Total revenues                      120,336,582          102,559,041            58,585,818  COSTS & EXPENSES  Cost of real estate sales            60,087,296             37,795,633             19,342,117 Cost of club operations              14,229,416             10,544,113              4,626,353 Commissions, closing costs and fees            13,815,097             11,881,148              7,474,904 Selling, marketing and other expenses             3,531,117              3,484,453              3,280,873 Depreciation             1,411,942                           1,109,429                 592,764 Homeowners association subsidy             1,039,149                 982,184                       -  Total costs and expenses             94,114,017            65,796,960            35,317,011  Operating income                     26,222,565            36,762,081            23,268,807  Other income (expense)                 75,185                   (65,018)                 (34,453)  Net income$                          26,297,750 $         36,697,063 $         23,234,354                                                                                                                                                                                                                                                                                                                                                                       The accompanying notes are an integral part of these consolidated financial statements.                                                                                3
 DLV/HHPI SUMMERLIN, LLC            CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY                       For the Years Ended December 31, 2019, 2018 and 2017                                                   HHPI             Discovery           Total  Balance at December 31, 2016  (unaudited)                         $         32,652,554 $           2,132,666 $          34,785,220  Contributions                                  -                            -                       - Distributions                            (10,000,000)                       -            (10,000,000) Net income                               23,234,354                         -             23,234,354  Balance at December 31, 2017  (unaudited)                                    45,886,908              2,132,666             48,019,574  Contributions                                  -                            -                       - Distributions                            (10,000,000)                       -            (10,000,000) Net income                               36,697,063                         -             36,697,063  Balance at December 31, 2018                   72,583,971              2,132,666             74,716,637  Contributions                                  -                            -                       - Distributions                            (16,051,691)                       -            (16,051,691) Net income                               26,297,750                         -             26,297,750  Balance at December 31, 2019$            82,830,030   $           2,132,666 $         84,962,696                                                                                                       The accompanying notes are an integral part of these consolidated financial statements.                                                                                          4
 DLV/HHPI SUMMERLIN, LLC                                CONSOLIDATED STATEMENTS OF CASH FLOWS                                For the Years Ended December 31, 2019, 2018 and 2017                                                                                                             2017                                                     2019               2018           (unaudited)  Cash flows from operating activities  Net income$                                         26,297,750   $          36,697,063 $          23,234,354   Depreciation                                       1,411,942                 1,109,429                 592,764   Loss on asset disposal                                  -                          3,162                       -  Effects of changes in operating assets and liabilities:    Additions to real estate development              (68,174,224)             (43,468,660)            (30,776,776)   Cost of real estate sales           60,087,296                              37,795,633             19,342,117   Deferred costs                                     1,033,078                (1,129,053)                 (71,596)   Accounts receivable                                 (325,477)                   (18,818)                (180,136)   Note receivable             1,400,000                                                 -                       -   Prepaid expenses and other assets                  3,323,058                (3,854,484)                (567,682)   Accounts payable                                   3,144,609                (3,008,155)             (4,500,706)   Customer real estate deposits            (1,662,000)                         1,662,000                       -   Deferred revenues          (17,906,964)                                      7,886,441             (3,750,446)   Membership deposits                                3,020,000                 4,450,000              8,550,000   Related-party receivables and payables            (1,263,831)                   281,689                 (81,562)    Net cash provided by operating activities           10,385,237             38,406,247            11,790,331  Cash flows from investing activities   Development of property and equipment               (634,694)               (5,314,598)            (19,035,973)   Proceeds from repayment of advance to related party                300,000                       -                       -   Advance to related party                                -                      (300,000)                       -    Net cash used in investing activities             (334,694)                (5,614,598)          (19,035,973)  Cash flows from financing activities   Special Improvement District bonds payments                (51,892)                 (57,195)                 (68,970)   Class B members subscriptions refunds                      -                          -             (1,740,000)   Capital lease obligations payments                  (220,004)                  (297,370)                (302,984)   Members' capital distributions          (16,051,691)                       (10,000,000)            (10,000,000)   Line of credit advances                            1,999,946                 3,994,720                       -    Net cash used in financing activities         (14,323,641)                 (6,359,845)           (12,111,954)  Net increase (decrease) in cash, cash equivalents,   and restricted cash                                (4,273,098)              26,431,804          (19,357,596)   Cash, cash equivalents, and restricted cash,    beginning of period           60,198,680                                    33,766,876             53,124,472   Cash, cash equivalents, and restricted cash,    end of period                                $        55,925,582 $         60,198,680 $         33,766,876                    The accompanying notes are an integral part of these consolidated financial statements.                                                                                                             5
 DLV/HHPI SUMMERLIN, LLC                            CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)                                   For the Years Ended December 31, 2019, 2018 and 2017                                                                                                                                                                                  2017                                                          2019                  2018             (unaudited)  Supplemental disclosure of cash flow information:  Cash paid for interest, net of amount capitalized$                15,190 $                22,722 $                 4,550  Development of property and equipment included in     accounts payable$                    -                                $           1,882,571 $                    -  Special Improvement District bond liability relieved     from sale of land$                                        76,974      $              138,036 $                78,954   Sale of land in exchange for a note receivable$           5,000,000     $                    - $                    -  Imputed interest on note receivable issued$                244,361      $                    - $                    -  Transfer of real estate and land development costs     to property and equipment$                    -                       $           3,187,911 $          18,190,819  Class B members subscriptions converted to     lot deposits$                    -                                    $                    - $            1,675,500                                       The accompanying notes are an integral part of these consolidated financial statements.                                                                                                                        6
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 1 – DESCRIPTION OF THE BUSINESS             Organization            DLV/HHPI Summerlin, LLC (the “Company”) was formed on June 13, 2014, under the laws of the State      of Delaware, in the United States of America (“US”).  On March 17, 2015, the limited liability company      agreement was amended changing the members of the Company to DLV Summerlin, LLC, a Delaware      limited liability company (“Discovery”) and Howard Hughes Properties, Inc., a Nevada corporation      (“HHPI”).  The Company is a joint venture, which wholly-owns certain entities incorporated under the laws      of the State of Delaware, for the purpose of developing and operating a luxury golf club with related      amenities and a residential community located in Summerlin, Nevada, a suburb of Las Vegas.   The golf club      and residential community (hereinafter collectively referred to as the “Project”) is expected to have      approximately 260 dwellings on 555 acres which will be offered for sale as a mix of custom lots, detached      built product units, and multi-family built product units.              Under the terms of the Company’s limited liability agreement, HHPI contributed real estate to the joint      venture with a book value of $12,051,598, which is net of Special Improvement District bonds of $1,326,319.      The agreed upon fair market value of the real estate contributed is $125,430,000.  Discovery contributed      cash with a value of $3,750,000, a portion of which was used to fund land improvements.  Discovery is      required to fund up to $30,000,000 in capital contributions. Following the recording of the parcel map by      HHPI, the primary remaining major entitlement was a Site Development Plan (“SDP”) approval for the      Project’s overall development plan, residential plan, and golf course. The SDP approval was a condition      precedent to commencing construction, starting sales and formally executing the joint venture documents.        The approval of the SDP was obtained on March 17, 2015 and the operations of the Company commenced.            The consolidated financial statements as of December 31, 2019 and 2018 reflect the financial position of      the Company and its wholly owned subsidiary Discovery Property Company, LLC (“DPC”) after the      consolidation of its wholly owned subsidiaries Summit Club, LLC (the “Club”), DPC SPEC I, LLC and      DPC Clubhouse I, LLC.  The Club was formed on December 22, 2015, and began operations in March      2017.  DPC SPEC I, LLC was formed on August 16, 2017.  DPC Clubhouse I, LLC was formed on      November 13, 2018.    NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES       Basis of presentation        The consolidated financial statements are prepared on the accrual basis in accordance with accounting      principles generally accepted in the United States of America (“GAAP”) and include all of the accounts of      the Company’s wholly owned subsidiaries in accordance with the provisions and guidance included in      Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”).  All      intercompany transactions and balances have been eliminated during consolidation.              Real estate under development       Real estate assets are stated at cost less any provisions for impairments.  Costs directly associated with the      acquisition and development of the Project including interest, real estate taxes, indirect costs incurred in      managing the development, legal and other costs clearly related to the Project are capitalized and presented      in the balance sheets within real estate under development.  Selling and marketing costs, which includes      advertising are expensed as incurred.                                                                                                  7
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)      Real estate under development (continued)            The Company records impairment losses on its real estate under development when events or circumstances      indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by      those assets are less than the carrying amount of the assets.  In such a case, an impairment loss would be      recorded to adjust the carrying amount to fair value. Management has determined that there were no      impairment charges required for the years ended December 31, 2019, 2018, and 2017.            Revenue and cost recognition            In May 2014, the FASB issued ASU 2014-09, “Revenues from Contracts with Customers (Topic 606)”. The      standard’s core principle is that a company will recognize revenue when it transfers promised goods or      services to customers in an amount that reflects the consideration to which the company expects to be      entitled in exchange for those goods or services. The Company adopted the standard as of January 1, 2019      using the modified retrospective method. There was no effect on prior period financials.             Sale of Real Estate      Revenues from real estate sales are recognized at a point in time when the land sale closing process is      complete. The transaction price is fixed based on the terms of the contract, and generally representative of      a single performance obligation. The fixed transaction price, which is the amount of consideration received      in full upon transfer of the land title to the buyer, is allocated to this single obligation and is received at      closing of the land sale less any amounts previously paid on deposit.             In situations where the Company has completed the closing of a real estate sale and consideration is paid in      full, but a portion of the Company’s performance obligation relating to the development of the land is still      unsatisfied, revenue related to the Company’s obligation is recognized over time. The Company recognizes      only the portion of the improved land sale where the improvements are fully satisfied based on a cost input      method. The aggregate amount of the transaction price allocated to the unsatisfied obligation is recorded as      deferred land sales and presented in deferred revenue. The Company measures the completion of its      unsatisfied obligation based on the costs remaining relative to the total cost at the date of closing.            When real estate under development is sold, the cost of sales includes actual costs incurred and estimates of      future development costs benefiting the property sold. In accordance with ASC 970-360-30-1, when      developed land is sold, costs are allocated to each lot based upon the relative sales value. For purposes of      allocating development costs, estimates of future revenues and development costs are re-evaluated      throughout the year, with adjustments being allocated prospectively to the remaining lots available for sale.             Sale of Developer Product      The Company contracts with customers to sell real estate and construct a vertical improvement (developer      product). The transaction price is fixed based on the terms of the contract. Subsequent changes due to      customer submitted change orders represent a contract modification. Contracts requiring developer product      contain two performance obligations; (1) the real estate and development of community amenities, and (2)      the construction of the vertical development. The transaction price, which is the amount of consideration      stipulated in the contract plus any contract modifications, is allocated to the multiple performance      obligations based on the respective established standalone selling prices. Revenue related to the sale of real      estate and development of community amenities is recognized over time, as described above in Sale of Real      Estate. Revenue from the sale of a developer product is recognized over time as the Company satisfies the      performance obligations.                                                                                                     8
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)      Revenue and cost recognition (continued)            The Company receives cash payments in the form of vertical improvement deposits from customers who      have contracted to purchase a developer product unit based on billing schedules established in the      Company’s purchase agreement contracts. The amounts are recorded in cash and cash equivalents, and a      corresponding vertical product liability is established at the date of receipt, which is presented in deferred      revenue. The Company recognized revenue on developer products using an input method of cost incurred      relative to total cost of the vertical product for measuring progress. In instances where the revenue      recognized exceeds the vertical deposits received, a corresponding contract asset and contract liability is      recorded.            The following table presents the Company’s revenues disaggregated by revenue source:                                                                   2019                2018     From contracts with customers       Real estate$                                         81,276,849     $          90,693,646       Vertical product           33,639,413                                            9,210,694       Membership dues             2,700,430                                            1,474,143        Total revenue from contracts with customers          117,616,692             101,378,483      Point in time revenue       Club operations                                       2,719,890                  1,180,558      Total revenues$                                        120,336,582    $        102,559,041                                                                                                                                               Below is a discussion of the performance obligations, significant judgements and other required disclosures      related to revenues from contracts with customers.            Contract Assets and Liabilities      Contract assets are the Company's right to consideration in exchange for goods or services that have been      transferred to a customer. Contract liabilities are the Company's obligation to transfer goods or services to      a customer for which the Company has received consideration.            The beginning and ending balances of contract assets and liabilities are as follows. Contract assets are      included in accounts receivable and contract liabilities are included in deferred revenue on the accompanying      balance sheets:                                                                 Contract            Contract                                                           Assets            Liabilities      Balance as of January 1, 2019$                    -                   $        110,847,097      Balance as of December 31, 2019$                          377,937     $          98,073,708                                                                                                                                                                                                  9
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)      Revenue and cost recognition (continued)            Remaining Unsatisfied Performance Obligations      The Company’s remaining unsatisfied performance obligations as of December 31, 2019 represent a measure      of the total dollar value of work to be performed on contracts executed and in progress. The aggregate      amount of the transaction price allocated to the Company's remaining unsatisfied performance obligations      as of December 31, 2019 and 2018 is approximately $123,760,000 and $141,000,000, respectively.            The Company’s remaining performance obligations are adjusted to reflect any known cancellations, revisions      to project scope and cost, and deferrals as appropriate.             Cash and cash equivalents           Cash and cash equivalents are short-term, highly liquid investments that are both readily convertible to      known amounts of cash, and so near maturity that they present insignificant risk of changes in value because      of the associated interest rates. Cash and cash equivalents are comprised of cash on hand, current accounts      and fixed deposits with original contractual maturities of three months or less.            Restricted cash            Restricted cash reflects amounts held in deposit as required per the terms of the Company’s line of credit      agreement.            Property and equipment           Property and equipment consists primarily of land improvements, club amenities, office furnishings,      equipment and vehicles.  Property and equipment also includes assets leased under capital lease agreements.       In the case of property and equipment held under capital leases, the asset and the related obligations are      initially recorded at the amount equal to the present value of future minimum lease payments computed on      the basis of the interest rate implicit in the lease or the incremental borrowing rate.  Expenditures that      increase capacities or extend useful lives are capitalized. Routine maintenance, repairs, and renewal costs are      expensed as incurred.            Property and equipment are stated at cost, less accumulated depreciation and any provision for impairment.      Depreciation and amortization are provided for primarily on the straight-line method over the estimated      service lives of the assets.              Estimated service lives for fixed assets are as follows:                                                                                          Asset             Years                                   Equipment            4 – 10                                Office Furnishings        7                                    Vehicles            5 – 10                                Amenity Buildings         40                                   Golf Course            15                                                                                                       10
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)            Related-party receivables            Related-party receivables include shared office expense and club charges to sale agents and employees that      will be repaid from future commissions on lot closings or payroll.            Accounts and note receivable            The Company grants credit to customers that arise in the normal course of operations.  The receivable      accounts consist of amounts billed to customers and accruals for amounts not yet billed.  The Company      writes off accounts when management believes the receivables are uncollectible based on the overall      creditworthiness of the customers and payment disputes.  An allowance is established based on reviews of      individual accounts, recent loss experience, current economic conditions, and other pertinent factors.  As      of December 31, 2019 and 2018, management deemed all accounts are collectible, thus no allowance was      recorded.            Deferred costs            Deferred costs include cost of lots sold plus closing and transfer fees and commissions paid on real estate sales.       Deferred costs are measured based on the costs remaining relative to the total cost at the date of closing.            Prepaid expenses and other assets            Prepaid expenses and other assets include prepayments of insurance and refundable cash bond deposits,      club inventory, supplies and vendor advances.  Prepaid expenses are amortized over the terms of the related      policies.  Inventory is stated at the lower of cost or market.            Accounts payable and related-party payables            Accounts payable and related-party payables include development expenditures, marketing expenses, club      operations and professional fees for the Project.            Customer real estate deposits            Customer real estate deposits consist of escrow funds received to hold a lot and funds received for customer      change orders on construction contracts.            Class B member subscriptions            Class B member subscriptions represents Class B member shares that are non-voting, non-transferable and      redeemable over the passage of time.  The shares entitle the holder to a pre-selected land lot within the      Project.  Members can elect to redeem all, but not less than all, of their Class B shares and have the Company      apply the proceeds to the purchase price due at closing under their real estate purchase agreement.  If a      member does not elect to execute their redemption rights, they will only be eligible to receive a distribution      upon liquidation of the Company.  The Class B shares are accounted for under the deposit method and      recorded as a liability in the accompanying financial statements.  Per ASC 480, Distinguishing Liabilities      from Equity, the accounting guidance requires the Class B shares to be treated as debt securities and not      equity securities due to the characteristics of the shares issued.                                                                                                 11
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)            Leases            Leases entered into by the Company that do not transfer substantially all the risks and benefits of ownership      of the leased asset from the lessor are classified as operating leases. Operating lease payments are recognized      as an expense in the statement of operations on a straight-line basis over the lease term.            Assets acquired pursuant to leases that transfer substantially all the rewards and risks of ownership to the      Company are accounted for as leased property under finance leases. Payments to the lessors are treated as      having capital and interest elements. Lease costs are capitalized if they relate to the real estate held for      development or expensed if they relate to sales and marketing in the period to which they relate.             Income taxes            Federal, state and local income taxes have not been provided for in the accompanying financial statements      as the members are responsible for reporting their allocable share of the Company’s tax basis income, gains,      deductions, losses and credits on their tax return.  In accordance with ASC 740, Accounting for Uncertainty      in Income Taxes, the Company must determine whether a tax position meets the “more likely than not”      threshold based on the technical merits of the position.  Once a position meets the recognition threshold,      measurement of the position reported in the financial statement is determined.  The Company has      determined no material unrecognized tax benefits or liabilities exist as of December 31, 2019 and 2018 and      no provision for income tax is required in the accompanying consolidated financial statements.  If applicable,      the Company recognizes interest and penalties related to underpayment of income taxes as income tax      expense.  The Company is not currently under exam by a taxing authority.  As of December 31, 2019 and      2018, the Company has no amounts related to accrued interest and penalties.  The Company does not      anticipate any significant changes to its tax positions over the next year.  Although the Company believes its      tax returns are correct, the final determination of tax examinations and any related litigation could be      different from what was reported on the returns.  Generally, the Company is currently open to audit under      the statute of limitations by the Internal Revenue Service as well as state taxing authorities for the years      ended December 31, 2016 through 2018.            Use of estimates            The process of preparing financial statements in conformity with GAAP requires management to make      significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure      of contingent assets and liabilities at the date of the financial statements and the reported amounts of      revenues and expenses during the reporting period. Actual results could differ from those estimates.  The      significant areas requiring the use of assumptions, judgments, and estimates relate to real estate under      development and contingencies.            Fair value of financial instruments            The carrying values of cash and cash equivalents, receivables, accounts payable, and other assets and      liabilities are reasonable estimates of their fair values because of the short maturities of these instruments.                                                                                                                                    12
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                     NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)            Distributions of cash and allocation of net income             Distributions of cash are made in accordance with the terms of the Company’s Operating Agreement (the      Agreement).  There were $16,051,691, $10,000,000, and $10,000,000 of distributions made to HHPI during      the years ended December 31, 2019, 2018 and 2017, respectively.                In general, net income or loss of the Company shall be allocated to the members such that, the Member’s      adjusted capital account is equal to the amount that the member would receive in a hypothetical liquidation      of the Company’s net assets at its recorded book value, as defined, at each balance sheet date.            Recent accounting pronouncements            In February 2016, the FASB issued ASU 2016-02, “Leases”.  ASU 2016-02, codified in ASC 842, amends the      existing accounting standards for lease accounting, including requiring lessees to recognize most leases on      their balance sheets and making targeted changes to lessor accounting.  ASU 2016-02 will be effective for      the Company on December 31, 2021.  Early adoption of ASU 2016-02 as of its issuance is permitted.  The      new leases standard requires a modified retrospective approach for all leases existing at, or entered into after,      the date of the initial application, with an option to use certain transition relief.  Management is currently      evaluating the impact of adopting the new leases standard on the accompanying consolidated financial      statements.    NOTE 3 - REAL ESTATE UNDER DEVELOPMENT       Real estate under development as of December 31, 2019 and 2018, consists of the following:                                                                     2019                2018    Land cost, improvements, entitlements and designs$        263,931,049  $        194,729,877    Development administration, taxes and insurance           21,845,312               16,423,632                                                       $       285,776,361 $        211,153,509     Less: Amenitites placed in service          (21,410,828)                          (21,378,730)    Less: Cost attributed to sales since inception (Note 5)         (168,605,349)          (113,305,283)                                                        $         95,760,184 $          76,469,496                                                                                                                      13
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 4 – PROPERTY AND EQUIPMENT, NET        Property and equipment, net as of December 31, 2019 and 2018, consists of the following:                                                                                                                                                   2019                2018    Land improvements$                                      10,451,358    $          10,238,823    Amenity buildings                                        4,273,781                 4,273,781    Golf course             6,308,332                                                  6,343,621    Equipment                                                1,116,399                    916,138    Office furnishing                                        1,013,153                    943,860    Vehicles                                                  845,068                     625,077    Equipment and vehicles under capital lease                868,978                     868,978                                                                 24,877,069             24,210,278     Less: accumulated depreciation            (2,929,129)                             (1,517,188)                                                       $         21,947,940 $          22,693,090   NOTE 5 – DEFERRED COSTS            Deferred costs at December 31, 2019 and 2018, consists of the following:                                                               2019                2018     Cost attributed to sales since inception (*)$        168,605,349      $        113,305,283     Commissions           21,284,276                                                  16,421,206     Closing costs             1,912,582                                                1,543,481     Incentive fees                                          33,223,785                25,673,937                                                                225,025,992           156,943,907     Less cost realized up to December 31:        Cost of real estate sales                          (139,963,946)              (79,876,650)        Commissions, closing costs and incentive fees          (43,136,376)            (29,321,279)                                                        $         41,925,670 $          47,745,978     (*) Transfer from real estate under development                                          NOTE 6 – RESTRICTED CASH            On November 30, 2017, DPC SPEC I, LLC entered into a $7,500,000 revolving line of credit agreement      with First Security Bank of Nevada.  Under terms of the agreement, DPC was required to maintain a deposit      of $3,000,000 as a compensating balance, restricted as to use.  At December 31, 2019 and 2018, the funds      were held in a 12-month fixed term deposit account earning interest at 1.3%.  Interest earned in each of the      years 2019, 2018 and 2017 was $39,079, $39,079, and $3,207, respectively.                                                                                                         14
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 7 – NOTE RECEIVABLE            In March 2018, the Company entered into a note agreement with a member for $5,000,000 in connection      with the sale of a custom lot.  The note requires annual principal installments of $1,000,000 beginning in      March 2019 until paid in full.  The note is without interest and is secured by the lot.  The outstanding balance      at December 31, 2019 and 2018 is $4,000,000 and $5,000,000, respectively.              In July 2016, the Company entered into a note agreement with a member for $400,000 in connection with      the sale of a custom lot.  The note matures on or before July 22, 2019 without interest and is secured by the      lot.  The note balance was paid in full during 2019. The outstanding balance at December 31, 2019 and 2018      was $0 and $400,000, respectively.   NOTE 8 – DEFERRED REVENUE        Deferred revenues at December 31, 2019 and 2018, consists of the following:                                                                2019                2018     Lots sold - Type 1$        109,542,588                                $          95,425,000     Lots sold - Type 2                                     151,960,088              120,242,500     Lots sold - Type 3           96,200,000                                           82,600,000     Built product - Desert Villas                           10,471,055                 3,750,000     Built product - Desert Bungalows           50,200,496                             28,279,281     Built product - Club Villas           13,982,500                                   4,537,500     Built product - Golf Cottages             2,200,000                                2,000,000     Built product - Point Villas           15,789,991                                 11,747,500                                                                450,346,718           348,581,781      Less: Real estate sales recognized                    (352,650,946)            (237,734,683)                                                        $         97,695,772 $        110,847,098   NOTE 9 – RELATED-PARTY TRANSACTIONS        On March 17, 2015, the Company entered into the Development Management Agreement with DLV      Summerlin Management, LLC (“DLVSM”).  Under the terms of the agreement, DLVSM agreed to provide      sales, marketing, administrative and supervision services to the Project. DLVSM is entitled to an initial      monthly management fee of $125,000 during the first twenty-four (24) months.   In addition, DLVSM is      entitled to a base management fee equal to 7.5% of the gross sales proceeds and memberships.  For the      years ended December 31, 2019, 2018 and 2017, the Company incurred development management fees of      $7,549,848, $7,522,750 and $4,857,125, respectively.  These fees are included in deferred costs in the      accompanying balance sheets and in commissions, closing costs and fees in the accompanying consolidated      statements of operations.            DPC leases office space from an entity affiliated with HHPI (see Note 15).                                                                                                                            15
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                    NOTE 9 – RELATED-PARTY TRANSACTIONS (continued)        In 2019 and 2018, the Company entered into 8 and 17 construction contracts for approximately $29,500,000      and $44,000,000, respectively, with Discovery Builders Nevada, LLC (DBN), an affiliate of Discovery, to      construct residential homes.  Total payments made in 2019 and 2018 were $39,535,888 and $17,074,500,      respectively, and are included in real estate under development in the accompanying consolidated balance      sheets.              In March 2018, the Company advanced $300,000 under a promissory note with a manager of the Club.  The      note requires annual payments of $50,000 beginning in March 2019.  The note bears interest at a fixed rate      of 2.88%.  The note matures on or before March 31, 2024.  The note was paid in full during 2019.         In September 2018, the Company entered into a contract with a member of Discovery for $4,625,488 to      construct a residential home.  Total payments received under the contract in 2019 and 2018 were $1,659,256      and $844,776, respectively, and are included in related-party payables in the accompanying consolidated      balance sheets.            The Summit Community Association (“Association”), a non-profit corporation, is responsible for      maintaining, operating and governing the common-interest community of the Project.  Under terms of the      Association’s Declaration of Covenants, Conditions and Restrictions and Reservations of Easements, the      Company is permitted to subsidize shortfalls of the Association’s operating expenses in exchange for annual      assessments on unsold lots. During 2019 and 2018, the shortfall subsidized to the Association was      $1,029,065 and $982,184, respectively, and are included in homeowners association subsidy in the      accompanying consolidated statements of operations.             The following are the other related-party transactions for the periods ended December 31, 2019 and 2018,      which are included in real estate under development or selling and marketing expenses:                                                              2019                2018     Discovery Land Ventures LLC - administrative expenses$              278,096 $              220,891     Summit Club Realty LLC - commissions on closings             4,863,070              4,674,278     Denton House - design services             1,939,544                               1,266,590     Westman Development LLC - charter flight services                121,536                 167,251     Recover Life LLC - beverage inventory for club events                   2,200                       -     Various Discovery Affiliate Clubs - shared overhead                 71,872                  48,227     Shared Staffing Services - affiliated entity of DLVSM that      provides labor services to the Project           11,944,935                        9,974,615         NOTE 10 – SPECIAL IMPROVEMENT DISTRICT BONDS        The Summerlin master planned community uses Special Improvement District (SID) bonds to finance      certain common infrastructure, including the infrastructure of the Project.   These bonds are issued by the      municipalities and, although unrated, are secured by the assessments on the land.   As of December 31, 2019,      the $311,830 balance of the bonds is related to the parcel of land contributed by HHPI, which was      transferred to DPC as a result of the formation of the Company, as discussed in Note 1.  DPC pays the      principal and interest on the bonds, and the interest portion is capitalized as a cost of the project.  During      2019, 2018 and 2017, $76,974, $138,036 and $78,954, respectively, of the outstanding bonds was relieved      and transferred to the lot owners in connection with lot sales.                                                                                                 16
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                      NOTE 11 – CLASS B MEMBER SUBSCRIPTIONS        DPC initiated a financing program with outside investors in order to fund on-going development      expenditures for the Project.  Outside investors contribute funds to DPC for a Class B interest in the      Company per terms of a Subscription Agreement.  The Class B interest is non-voting, non-transferable and      redeemable over the passage of time.             The Class B interest can be redeemed and the proceeds applied to the purchase of a specified lot at an agreed      upon amount.  The redemption timing is triggered by the recording date of a subdivision plat with respect      to lots and the offering plan date with respect to condominium units.   A member has up to 90 days from      the date of plat recording or offering plan to execute redemption and purchase a vacant lot.  During 2015,      twenty-five subscription agreements were issued accounting for $41,833,925 of Class B contributions to      DPC.  In 2017 one subscription agreement for $1,740,000 was refunded.  There are no unredeemed member      subscriptions at December 31, 2019 and 2018.   NOTE 12 – MEMBERSHIP DEPOSITS        DPC began selling refundable golf memberships at Summit Club in March 2017 for the purpose of      permitting members the recreational use of the club facilities.  DPC will construct a golf course and all club      facilities in exchange for the golf memberships.  The Club is a non-equity membership club. Members who      resign are entitled to a refund, upon resale of the existing membership, equal to the greater of 80% of the      then-current deposit price, or the amount previously paid by the resigning member.  DPC currently intends,      but may limit the number available in any category at its sole discretion, to issue the following types of      memberships:                  245 golf memberships            30 national golf memberships            100 social memberships            A total of eighteen and twenty-nine golf memberships were sold during 2019 and 2018 for $3,500,000 and      $4,450,000, respectively.  A total of 104 golf memberships were sold through December 31, 2019. No      national golf or social memberships have been sold.            DPC has the right to issue 6 honorary memberships and 15 charter memberships.  As of December 31,      2019, 2 honorary memberships have been granted.     NOTE 13 – LINE OF CREDIT        On November 30, 2017, DPC SPEC I, LLC entered into a loan agreement with First Security Bank of      Nevada for a $7,500,000 revolving line of credit for the development and construction of spec units within      the Project.  The loan is secured by estate lots 110, 111 and 112.  In 2019, the line of credit was increased      by $1,500,000, and the Company exercised its 12-month extension option.  The loan matures November      30, 2020, and accrues interest at 6%.  The outstanding balance due at December 31, 2019 and 2018, was      $5,994,666 and $3,994,720, respectively.  Interest paid during 2019, 2018 and 2017 totalled $333,913,      $131,693 and $0, respectively, and was capitalized into real estate under development.  The Company is in      compliance with its covenants as of December 31, 2019 and 2018.                                                                                                      17
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                      NOTE 14 – FINANCE LEASE OBLIGATIONS        The finance leases relate to the acquisition by the Club of golf equipment.  The future minimum lease payments      under the finance leases for the year ending December 31 is as follows:        2020                                                                   $             247,854     2021                                                                                    29,983      Total minimum lease payments                                                   277,837      Less amount representing interest                                               (9,629)      Present value of future minimum lease payments                         $             268,208            The annual implicit interest rate ranges from 2.9% to 4.27%.   NOTE 15 – COMMITMENTS AND CONTINGENCIES             In October 2018, DPC relocated to a different suite and entered into an amended 56-month operating lease      agreement for office space with The Shops at Summerlin LLC, an affiliate of HHPI.  Under terms of the      agreement, DPC may terminate the lease with 12-months’ notice.  The lease requires monthly payments of      $9,896.             The future minimum lease payments under the operating leases for the years ending December 31 are as      follows:        2020                                                                   $             266,870     2021                                                                                  178,774     2022                                                                                  136,000     2023                                                                                    57,363      Total minimum lease payments                                           $             639,007                                                                                                       Rent expense totaled $311,000, $311,000 and $267,000 for the years ended December 31, 2019, 2018 and      2017, respectively, and are included in homeowners association subsidy in the accompanying consolidated      statements of operations.    NOTE 16 – CONCENTRATION OF RISK        The Company places its cash and cash equivalents with a high quality financial institution.  Balances with      this institution regularly exceed Federal Deposit Insurance Corporation insured limits; however, to manage      the related credit exposure, the Company continually monitors the credit worthiness of the financial      institution where it has deposits.                                                                                                     18
 DLV/HHPI SUMMERLIN, LLC                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                      NOTE 17 – SUBSEQUENT EVENTS        The Company has evaluated subsequent events for potential recognition and disclosure through March 20,      2020, the date the financial statements were available to be issued.                                                                                                 19